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How does business analytics differ from data analytics?

by Daniel J. Power
Editor, DSSResources.COM

Both business analytics and data analytics are relatively new terms in the business lexicon. Students and potential employers as well as faculty need to know how the terms differ and professors especially need to explore and specify the course work that should be completed for each area of specialty. Analytics and data are increasingly central to decision making in modern organizations. The increasing ease of gathering, storing and processing data has led to a highly varied and growing set of data for analysis in most organizations. Many employers want to hire people who can apply tools to analyze data and make sense of what analyses are needed and what the results mean.

According to a number of sources including online materials for academic programs and job recruiting materials, organizations are trying to hire business analysts trained in business analytics and data or database analysts trained in data analytics. There is definitely an overlap in these programs, jobs and careers. Both types of employees will work with data, use analytical tools like SAS and Tableau, and will try to find useful results that answer questions posed by a client. The descriptions for these programs/careers/jobs are not universally defined.

Power (2012) defined business analytics as "the practices, processes, skills, and technologies used for exploration and investigation of historical business data, especially performance related data, to identify relationships and insight and improve business planning. The goal of business analytics is to turn large sets of raw data into meaningful and manageable information for business use." In a 2013, blog post Power describes a data scientist as "a person who has the knowledge and skills to conduct sophisticated and systematic analyses of data. A data scientist extracts insights from data sets for product development, and evaluates and identifies strategic opportunities. "

Davenport and Harris (2007) define analytics as "extensive use of data, statistical and quantitative analysis, exploratory and predictive models, and fact-based management to drive decisions and actions. The analytics may be input for human decisions or drive fully automated decisions (p. 7)."

Techopedia notes "Data analytics refers to qualitative and quantitative techniques and processes used to enhance productivity and business gain. Data is extracted and categorized to identify and analyze behavioral data and patterns, and techniques vary according to organizational requirements. Data analytics is also known as data analysis.

According to the International Institute of Business Analysis (IIBA) President Kathleen Barret, "the Business Analyst role is about linking and liaising. Broader than IT, the BA focuses on solutions in the context of the organizationís goals, regardless of whether they utilize technology. The BA role is about meeting business needs and ensuring investment in the right solutions." Many other job titles are used for specialists in business analytics including systems analyst, business intelligence analyst, data scientist, decision support analyst. IIBA and other groups both in Universities, other non-profits, and for-profit organizations with varied credibility are trying to rationalize the field and profession.

Data analytics and the role of a data analyst, database analyst or data scientist supposedly differs in a meaningful way from business analytics and the role of a data analyst. The term data analyst has been in use for many years and predates the term data analytics. A website called snagajob.com explains "Data analysts translate numbers into plain English Every business collects data, whether it's sales figures, market research, logistics, or transportation costs. A data analyst's job is to take that data and use it to help companies make better business decisions." Snagajob doesn't seem to define business analyst, but a similar site betterteam.com defines the business analyst role as "the link between the end user and a project manager. The requirements for business analysts may vary between positions and the business analyst key responsibilities may differ from company to company, but their main purpose is to analyze, evaluate, and refine processes."

Based on a job listing at Indeed.com for a Senior Business Data Analyst, the person would be responsible to: 1) "Partner with product managers, and engineering to enable decision support and key customer insights through web tracking metrics; 2) Study website behavior patterns using site metric tools to analyze and optimize business results and user experience; 3) Uses quantitative data gathered with software measurement tools, traffic extracts, click streams and drill-downs to develop an understanding of customer behavior; 4) Develops and Coordinates report requirements with internal customers to meet business objectives; 5) Provides guidance to business stakeholders on what data to capture, how to map data needs to business questions, and how to prioritize analysis work while partnering with our data experts to execute; and 6) Applies statistics-based intelligence to business issues and formulates recommendations."

Another job listing at Indeed.com for a Data Analytics Specialist notes "as a member of the Data Analytics team, you will be responsible for: 1) Designing and developing data models, visualization dashboards, and presenting solutions to the business; 2) Maintaining the existing global data analytics toolset; 3) Supporting data collection; 4) Developing data analytics work programs and reports for large data sets to identify anomalies and business risks; 5) Developing and updating procedures related to data collection and analytics; and 6) Identifying data analytics opportunities, designing and executing tests, data extraction, and analysis utilizing the companyís various computer software packages within established deadlines. (edited to disguise the company)"

Carnegie Mellon University's Tepper School of Business (N.D.) has an article titled "Choosing Between a Masterís in Data Analytics vs Business Analytics." The article claims a "data analytics graduate program typically focuses on mathematical and programming skills and tools; this provides students with the knowledge they need to transform their organizationís data into a usable asset. ... An MS in Business Analytics typically offers courses that provide a comprehensive set of both technical and business skills, including management and communications. This enables students to become proficient with state-of-the-art technologies such as machine learning and optimization, while also learning how to best communicate their ideas to the rest of their organizations." The article/web page is promoting the CMU online Master of Science in Business Analytics (MSBA) program." The credibility, consistency, meaningfulness, and accuracy of much of the information defining these evolving terms and job titles can be questioned, but a review of the details and specifics on the websites suggests that business and data analysts are often differing jobs with differing education, knowledge and skill requirements. As a starting point, a business or decision analyst who performs business analytics tasks uses quantitative and statistical tools to identify data-based results that inform business decision making. A data analyst who is performing data analytics tasks often works on a team to extract data relevant to a specific task and then assists in applying tools to improve processes and systems and provide inputs and conclusions useful in decision making and decision automation.

Is is useful to explore the relationship between business analytics and data analytics concepts and realms of practice. Perhaps both Business Analytics and Data Analytics are Sub Classes of a Super Class called Analytics in a specialization Hierarchy. Perhaps Business Analytics is a subset of a concept called Data Analytics. Conversely, perhaps Data Analytics is a subset of a concept called Business Analytics. See Figure 1for alternative representations of these possible relationships.

Opinions and perceptions of those using the terms seem to arbitrarily change what job title, course names, and/or program names are chosen in companies and at Universities for analytics jobs and programs. This brief discussion is a first approximation to explaining plausible, rational differences for usage of these two analytics terms. As noted earlier, all of the analytics professionals with these varied job titles have in common working with data, using analytical tools, and one hopes finding useful results. Perhaps business analytics focuses on answering business questions, primarily using internal business data as input. Perhaps data analytics is less restricted and uses more technical tools like Structured Query Language (SQL) and the R language and environment for statistical computing and graphics. Perhaps not always. A job title matters, but the list of required skills and competencies matters the most in hiring. Overall, it seems these terms differ in degree rather than in kind. There is a definitional continuum involving shades of meaning and task emphasis between the end points of business analytics and data analytics. Based on this discussion, we can not identify sharp, yes-np distinctions between business analytics and data analytics. Currently, the two types of analytics are not defined as discreet categories, but rather the terms are overlapping and related.

References

Author Unknown, "Business Analytics vs. Data Analytics: What You Need to Know," Blog post Colorado Technical University, Feb. 05, 2016 at URL https://www.coloradotech.edu/blog/2016/february/business-analytics-vs-data-analytics-what-you-need-to-learn

Author Unknown, "Business Analyst Job Description," last updated April 17, 2018 at URL https://www.betterteam.com/business-analyst-job-description.

Author Unknown, "Data Analyst Job Description," at URL https://www.snagajob.com/job-descriptions/data-analyst/.

Author Unkown, "Data Analytics," Techopedia, N.D. at URL https://www.techopedia.com/definition/26418/data-analytics

Author Unkown, "Choosing Between a Masterís in Data Analytics vs Business Analytics," Carnegie Mellon Tepper School of Business, N.D. at URL https://analytics.tepper.cmu.edu/articles/masters-data-analytics-vs-business-analytics/

Barret, K., "Business Analysis: The Evolution of a Profession," at URL http://www.iiba.org/Careers/Careers/business-analysis-evolution-of-a-profession.aspx

Davenport, T. H. & Harris, J. G. (2007). Competing on Analytics: The New Science of Winning. Harvard Business School Press.

Power, D., What is analytics? DSS News, Vol. 13, No. 18, September 16, 2012. http://dssresources.com/faq/index.php?action=artikel&id=249

Power, D., "What is a data scientist?" DSS News, Vol. 14, No. 13, June 23, 2013 at URL http://dssresources.com/faq/index.php?action=artikel&id=265

Power, D., "Using ĎBig Dataí for analytics and decision support," Journal of Decision Systems, Vol. 23, No. 2, 2014, pp. 222-228, https://doi.org/10.1080/12460125.2014.888848 .

Power, D., "Data Science: Supporting Decision Making," Journal of Decision Systems, Vol. 25, No. 4, 2016, pp. 345-356, https://doi.org/10.1080/12460125.2016.1171610 .

Business Analytics versus Data Analytics

Last update: 2018-06-24 08:32
Author: Daniel Power

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